2 Louisiana insurance companies fail after Hurricane Ida

Dec 5, 2021, 9:41 AM | Updated: 9:46 am

BATON ROUGE, La. (AP) — Insurance companies operating in Louisiana will be charged at least $100 million to pay the claims of two failed property insurers who went belly up in Hurricane Ida’s aftermath. But the cost of dealing with the insolvent insurers ultimately will fall on the state after companies recoup the dollars through a series of tax credits.

The Advocate reports that the board of the Louisiana Insurance Guaranty Association — a state-sponsored safety net for policyholders — voted for the first time since 2004 to charge insurers 1% of their net written premiums to help fill its coffers.

The guaranty fund, known as LIGA, covers claims for policyholders whose insurers become insolvent.

Its work is being triggered after the state insurance department in mid-November took control of two regional insurers whose finances tanked following Hurricane Ida: Access Home Insurance Co. and State National Fire Insurance Co.

The two companies provided coverage for around 28,000 homeowners.

Now, when those policyholders file a claim, they’ll deal with LIGA, or one of its contractors. At least 8,000 claims have already been filed so far.

“Our whole goal is to pay the people as timely and effectively as possible, but we’re in a bit of a transition period,” said John Wells, LIGA’s executive director. “We’re talking days and weeks, not months and years, to get people paid.”

At a minimum, the guaranty fund will need $100 million to fill the gap between what’s owed to policyholders and what the insurers have on-hand, Wells said. But LIGA could turn to insurers again next year for an additional 1% assessment if it needs funding to cover more insolvencies after two years of devastating storms across Louisiana.

Hurricanes Laura, Delta and Zeta in 2020 cost insurers $10.6 billion. Hurricane Ida, which struck in August, is projected to cost insurers between $20 billion and $40 billion.

Access Home Insurance received claims totaling around $180 million following Ida and had just $115 million in reinsurance and cash available. Meanwhile, State National Fire Insurance logged more than $70 million in claims with $41 million on-hand, Wells said.

Policyholders with the two firms won’t lose their coverage, and they can continue to file claims for any losses that may arise. They can even choose to renew their policies. Officials are hoping to hand the policies off in a bundle to a new carrier.

Insurance Commissioner Jim Donelon said that five or six companies have already reached out to express interest in taking on the policies.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Republican presidential candidates, from left, former Arkansas Gov. Asa Hutchinson, former New Jers...

Associated Press

3rd Republican presidential debate is set for Nov. 8 in Miami, with the strictest qualifications yet

The third Republican presidential debate will be held in Miami on Nov. 8, a day after several states hold off-year elections.

1 day ago

During the equinox, the Earth’s axis and its orbit line up so that both hemispheres get an equal ...

Associated Press

The fall equinox is here. What does that mean?

The equinox arrives on Saturday, marking the start of the fall season for the Northern Hemisphere. But what does that actually mean?

1 day ago

Ray Epps Ray Epps, an Arizona man who became the center of a conspiracy theory about Jan. 6, 2021, ...

Associated Press

Ray Epps, an Arizona man who supported Trump, pleads guilty to Capital riot charge

Ray Epps, the target of a conspiracy theory about the Jan. 6, 2021, attack, pleaded guilty on Wednesday to a misdemeanor charge.

3 days ago

Former President Donald Trump repeatedly declined in an interview aired Sunday, Sept. 17, 2023, to ...

Associated Press

Trump refuses to say in a TV interview how he watched the Jan. 6 attack unfold at the US Capitol

Former President Donald Trump repeatedly declined in an interview aired Sunday to answer questions about whether he watched the Capitol riot.

7 days ago

This frame grab from video, provided by the Mexican government, shows Ovidio Guzman Lopez being det...

Associated Press

Mexico extradites son of ‘El Chapo,’ Ovidio Guzman Lopez to US

The son of notorious cartel leader Joaquin “El Chapo” Guzmán, Ovidio Guzman Lopez was extradited to the U.S. on Friday.

7 days ago

impeachments in US history...

Associated Press

A look at notable impeachments in US history, including Texas Attorney General Ken Paxton

Texas Attorney General Ken Paxton was acquitted Saturday on during his impeachment trial. Here's a roundup of impeachments in U.S. history.

8 days ago

Sponsored Articles

Home moving relocation in Arizona 2023...

BMS Moving

Tips for making your move in Arizona easier

If you're moving to a new home in Arizona, use this to-do list to alleviate some stress and ensure a smoother transition to your new home.



When most diets fail, re:vitalize makes a difference that shows

Staying healthy and losing weight are things many people in Arizona are conscious of, especially during the summer.


OCD & Anxiety Treatment Center

5 mental health myths you didn’t know were made up

Helping individuals understand mental health diagnoses like obsessive compulsive spectrum disorder or generalized anxiety disorder isn’t always an easy undertaking. After all, our society tends to spread misconceptions about mental health like wildfire. This is why being mindful about how we talk about mental health is so important. We can either perpetuate misinformation about already […]

2 Louisiana insurance companies fail after Hurricane Ida